Tue, Jul 31, 2018 - Page 10 News List

Human bankers losing to robots at Swedish bank

‘STRATEGIC INITIATIVE’:Nordea Bank is cutting 6,000 jobs, with robots taking over from people in everything from asset management to answering calls from retail clients

Bloomberg

Something interesting happened in Swedish finance last quarter. The only big bank that managed to cut costs also happens to be behind one of the industry’s boldest plans to replace humans with automation.

Nordea Bank AB, whose chief executive officer Casper von Koskull has said his industry might only have half its current human workforce a decade from now, is cutting 6,000 of those jobs.

Von Koskull said the adjustment is the only way to stay competitive, with automation and robots taking over from people in everything from asset management to answering calls from retail clients.

While many in the finance industry have struggled to digest the message, the latest set of bank results in Sweden suggests that executives in one of the world’s most technologically advanced corners are drawing inspiration from Nordea.

SEB AB chief executive officer Johan Torgeby has said that “whatever can be automated will be automated.”

Nordea, which is the only global systemically important bank in the Nordic region, saw total costs drop 11 percent in the second quarter of this year from a year earlier as staff numbers fell 8 percent to about 29,300.

By comparison, Barclays PLC, which has about the same market value as Nordea, had almost 80,000 employees at the end of last year, according to the latest figures. To be sure, Barclays’ assets are more than twice as big as Nordea’s.

SEB, Svenska Handelsbanken AB and Swedbank AB all acknowledge that adding technology is key.

However, they have different ideas about the extent to which humans need to be replaced by robots and they have been far more restrained with job cuts than Nordea.

Some banks have even gone on a hiring spree to add technology specialists and computer scientists.

Nordea’s lower costs helped it deliver a 31 percent annual increase in operating profit last quarter, the best performance of Sweden’s four main banks.

After waiting about a year for Nordea’s digital plan to pay off, investors were rewarded when the bank’s earnings report triggered the best share-price performance since early February.

Other Swedish banks are trying to automate more and to do so faster.

There is no question that new technology is “impacting customer behaviors and disrupting banks’ existing business models,” Torgeby said.

A bank that had previously stood out for its reluctance to replace branches with automation appears also to be adjusting its approach.

Handelsbanken chief executive officer Anders Bouvin has said going more digital will make the bank’s operations more efficient, and he wants management to push through “strategic initiatives for business development and efficiency improvement.”

Handelsbanken plans to unveil more details after the third quarter.

Swedish media have reported that the bank’s automation plans might put about 2,000 employees out of work, though Bouvin has so far said he does not want to fire people.

Swedbank chief executive officer Birgitte Bonnesen has been looking for ways to automate more services since she took the helm in 2016.

The bank, which for almost two years has had a separate digital unit, has also focused on automating mortgage applications.

However, to date, the only Swedish bank to have seen its headcount go down in any significant way is Nordea.

There were about 2,500 fewer people working there at the end of the second quarter than there were a year earlier.

This story has been viewed 2359 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top